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Jan 30, 2020

China trade deficit has cost the US 3.7 million jobs this century, report says

Jeff Cox




RT: Containers China trade port 190806
Containers sit at the Yangshan Port in Shanghai, China, Aug. 6, 2019.
Aly Song | Reuters

The U.S. has lost 3.7 million jobs since 2001 due to its trade imbalance with China, with most of the damage done to manufacturing, according to a report released Thursday.
As the deficit has continued to swell, American workers have suffered, according to the Economic Policy Institute, a nonpartisan think tank in Washington, D.C. generally considered to be left-leaning.
Among the study’s findings: Some 1.7 million jobs have disappeared since the beginning of the financial crisis in 2008; of the total losses, 2.8 million, or about three-quarters, have come from manufacturing; and the deficit continues to grow, with employment taking a hit across all 50 states even as nonfarm payrolls have continued to grow.
President Donald Trump has made closing the gap a priority of his administration.
Along those lines, he has instituted billions of tariffs, though tensions between the sides have eased somewhat following an agreement on a phase-one deal.
The report cites a variety of factors used to calculate the job losses.
One of the big issues it cites is the admission of China into the World Trade Organization, a move that was supposed to boost U.S. exports to China but instead resulted in a flood of dumped goods and a wave of outsourcing that has hit manufacturing and technology particularly hard. The authors also were critical of China’s previous moves to devalue its currency, which benefits exports.
“We’ve lost nearly five million manufacturing jobs in the last 20 years. At least half of these job losses are explained by the growth in the China trade deficit,” said Robert Scott, director of trade and manufacturing policy research at the EPI. Scott said the results have been “devastating for Main Street America.”
The authors of the report said Trump was right in going after China on trade but said the efforts should be strengthened.
Despite the tariffs and emphasis on shifting the balance, the U.S. still had a $320.8 billion deficit with China in 2019. But that was a sharp decline from 2018, which saw a record $419.5 billion shortfall.

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